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Thursday, January 03, 2013

Charles Carreon’s Trademark Claims End, Not With a Bang, but a Whimper

by Paul Alan Levy

Last summer, I blogged about trademark claims threatened by Charles Carreon, a California lawyer with a notorious past who maintains a private practice out of his home in Arizona. He had threatened suit against an anonymous blogger for making fun of Carreon at a web site using the domain name charles-carreon.com, leading us to sue for a declaratory judgment of non-infringement. His threats against the company that had sold the blogger a private registration induced that company to temporarily out the blogger, although it restored the private registration after Public Citizen interceded.

There have been several developments since I posted that story, but the bottom line is that, after doing his best to avoid being served and hence forced to defend the case, Carreon surrendered completely, serving a Rule 68 judgment that gave the blogger everything he had sued, and exposing Carreon to claims for a substantial award of attorney fees. Bloggers at Popehat and Techdirt have followed the story in some detail, as has a recent law school graduate. Some members of the public have been deliberately visiting PACER on a regular basis, using their RECAP software to ensure that any member of the public can get free access to the entire court file. Suffice it to say that, after ducking service for several months, Carreon was served outside a courtroom in the vary federal court in which the declaratory judgment action was filed. Then, after demanding that the blogger accept restrictive terms on his use of the domain name, threatening to sue Public Citizen for damages if its client would not agree, Carreon simply folded his hand and submitted an offer of judgment under Rule 68, which the blogger accepted because it gave him complete relief on the merits.

It is not clear whether Carreon understood, when he made this offer of judgment, that its acceptance would make the blogger the prevailing party and hence expose Carreon to an application for an award of attorney fees. However, we have sought an award of attorney fees, not only under the Lanham Act for Carreon’s having made preposterous claims of trademark infringement and cybersquatting, but also under Federal Rule 4(d)(2) for forcing us to serve him in person instead of signing a waiver of service, and then refusing to pay a few hundred dollars in service expenses as Rule 4 required.

Carreon has not yet responded to the Lanham Act fee application, but in objecting to the award of fees for having ducked service, Carreon essentially threw himself on the mercy of the court, claiming that he was so distressed by the online firestorm occasioned by his litigation against Matthew Inman that he wasn’t thinking carefully.

In trying to persuade me not to pursue the claim for attorney fees on the merits, Carreon claimed that the suit for a declaratory judgment was altogether unnecessary because, he claimed, he never would have sued for a trademark violation; if we had only waited, he said, we would have seen that.

If, in fact, Carreon never intended to pursue his threats to sue the blogger, that is perhaps the worst of all, not only because it means that Carreon has probably cost himself a great deal of reputational and financial harm for having a big mouth, but also because it puts him at significant risk of other legal consequences. For example, in addition to threatening to sue Register.com, Carreon threatened to sue Walgreens, the blogger’s employer when the case began, demanding an extensive preservation of electronic records. We could not help thinking at the time that his real purpose was to try to drive a wedge between the blogger and his source of employment. If Carreon never intended to file such a claim, the blogger may have a claim for intentional intereference with contract, and perhaps Walgreens has a claim of its own for the expenses incurred in complying with potential data preservation obligations relating to an intentionally empty threat.

Moreover, if Carreon’s current statement about his intentions last summer is true, there may be ethics consequences. After all, without having to file suit, he managed to intimidate the blogger’s domain name registrar into placing the blogger’s name into the public WHOIS record where other members of the public were able to see it; Carreon himself took advantage of the disclosure to feature the blogger’s name publicly on his “rapeutationist” blog. And yet, Carreon now claims, he never intended to file the lawsuit at all.

The Federal Rules of Civil Procedure, Rule 26(b)(5) and the California Code of Civil Procedure, section 2031.285, both require a party who receives information that has been the subject of a claim of privilege to sequester the information pending a final ruling on the privilege. This rule has been applied to information obtained about the identity of an anonymous Internet speaker, and both an ABA Formal Opinion, and ethics rulings in some states, have taken the position that a violation of the obligation to sequester can constitute an ethical issue. Consquently, Carreon’s insistence that he was never actually going to institute legal proceedings to vindicate his claim of trademark infringement outs him at risk of renewed disciplinary proceedings by the California and Oregon bar authorities.

Carreon’s contention that he would never have followed through on his threats if legal action also reflects poorly on Register.com’s craven release of the blogger’s identity, albeit temporarily. While the case against Carreon was pending, we put Register.com on notice of a possible claim, perhaps a class action claim, for advertising (and charging extra for) a private registration service without providing any real safeguards against spurious claims demanding disclosure of the registrant’s identity. We have tried to discuss with that company's counsel how they will handle cases like this differently going forward, and have postponed legal action to see whether such talks could be fruitful. But, to date, it has never been convenient for Register.com’s representative to actually discuss its policies and procedures.

Now that the merits of the Carreon case have been concluded, we will have to see whether it is possible to avoid litigation on that aspect of the problem.

Comments

That's a weird move on his part. I think he actually had a reasonable claim on the domain name under 1125(d) and under the California personal names statute. So he gave up his colorable claims, without any protection from a fee award?